Growing and selling wines in the USA have differed greatly from the practices adopted in the Old World. Stricter regulation of the industry as well as an accent on branding and marketing, allowed New World wine companies to compete favorably against the best wine companies of the Old World. Among US wineries, Robert Mondavi company stands out as a producer whose wine is known all around the world. The success that Mondavi has earned is the result of the company’s investment in new technologies, marketing and sales, as well as the profitable partnerships it managed to strike with the wineries of the Old World.
From the very outset, Mondavi’s company made a bet on the quality and superb taste of its products. While many wineries relied on the middle-class segment, Mondavi posed his company as a luxury wine producer. To maintain the superb quality of his wine, Mondavi engaged in innovations such as the use of “cold fermentation, stainless steel tanks and small French oak barrels to age the wine” (p. 6). Innovations ensured not only the superb taste of Mondavi’s products but allowed to make production more cost-effective. An additional advantage of the innovative character of Mondavi’s enterprise was the fact that it allowed him to engage in experiments with mixing grapes of different sorts and countries of origin, creating a superb taste known all around the world.
The second factor that largely contributed to Mondavi’s success was the branding and distribution schemes he used. While in Europe few wine brands were marketed Mondavi made it his priority to create brands well known and well-liked by the customers. Creating a series of luxury wines, he partnered with distributors who promoted his brands. Moreover, by creating a large distributor network, he ensured that his wines were well represented across the whole territory of the US and abroad.
Thirdly, Mondavi ensured his company’s international expansion by creating joint ventures and partnerships with European producers. Not only it allowed the company to gain access to local markers in different countries, but it also let Mondavi learn the secrets of wine production of the best wineries across the globe. The best practices he learned abroad were immediately incorporated into the company’s production processes due to the company’s innovative and on-the-front-line character.
Despite the success and global expansion of Mondavi’s company, there are some areas that need improvement. First, the company concentrates on luxury wine production, while other segments of the market are poorly represented. Mondavi should make more efforts in the middle-class and lower-class segments to increase his potential customer base. To be successful in these segments, the company should use the technical advantage it has to make its production processes more even cost effective without considerably lowering the quality of wine. Mondavi’s vinery, a leading distributor across the globe, can add attraction to its new middle-class segment.
Secondly, Mondavi employs a single sales force for all his marketing activities which makes it difficult to educate different distributors as to the peculiarities of his premium-line wine. Since the wine is distributed through different channels, it would be wise for Mondavi to differentiate the company’s sales force department, creating subdivisions responsible for this or that particular distributor. This way, the education of distributive channels about the premium line wines will be more effective and less time-consuming for the company.